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It Takes More than a Platform to Succeed in the Sharing Economy

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In an article for Medium, Sangeet Paul Choudary (@sanguit) discusses the pitfalls of the sharing economy and how a platform may not cut it. As of recently, a new variety of vertical-specific platforms have emerged, creating two classes of new opportunities: higher end gigs and real world gig coordination, allowing people with spare time to find an extra income source.

The gig economy is not yet saving anyone, as these labor platforms have unbundled the workings of a traditional job such as stability, social contact and healthcare -- none of which existing platforms offer to their service providers.

Enter producer economics -- the battle between costs and benefits, is especially important for labor platforms as service providers depend on these platforms to make a living. As Airbnb and Uber began to progress, they reduced potential costs to encourage the participation of producers. However, there has been a lot of controversy over whether Airbnb and Uber have set a good example, or are employing contract laborers who don’t enjoy the benefits of full-time employment.

There are two important implications that Choudary stresses. The first is that every platform should lay out all the costs and benefits that fall into three categories: risk management, learning and improvement, and well-being. Secondly, the fact that most workers may not be contractually signed to a single platform, but rather, many work on multiple platforms. Therefore, a single platform can’t guarantee well-being and as a result, the platform economy needs to incorporate services that guarantee producer well-being across more than just one platform.

Some examples of the emergence of these horizontal rather than vertical initiatives are how some players are powering better job discovery and management, the incorporation of traditional insurance catering directly to service providers of multiple platforms, and greater back office support.

The future of job creation is about providing the infrastructure that enables produces to find a better substitute than traditional jobs. The only way to enable this is if platforms ensure producer participation economics -- specifically, players need to emerge to provide services across multiple platforms.

Read source article here

Topics: Sharing Economy

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